How the Fed is arranged
The Board of Governors, the twelve regional banks, and the Federal Open Market Committee, and how the vote rotates among them.
See who decides →How central banking works, behind the scenes
Every so often a committee at the Federal Reserve sits down and decides whether interest rates should move. They can leave them where they are, put them up, or bring them down. When they have decided they announce it, and it gets reported everywhere. Most people hear whether it went up or down and by how much, and not much else.
This site explains how they get to that decision, and what they publish once they have made it. It covers who is in the room, how often they meet, and what they look at before they decide.
What gets published, and when
A decision does not arrive on its own. The Federal Open Market Committee puts out a statement on the day, and a separate note listing the rates it has actually set. Minutes of the discussion follow later. Four times a year it also publishes what its own members expect for growth, unemployment and inflation. That one is called the Summary of Economic Projections.
Where the rate you hear about comes from
The rate everyone quotes is a range the Federal Reserve aims for, not a rate anyone actually pays. It keeps rates inside that range mainly by paying banks interest on the money they park with it. That payment is called the Interest on Reserve Balances, and it does most of the work.
Doing the sums yourself
A quarter point sounds small. Put it against a mortgage or a credit card balance and you can see what it actually costs. The tools here do that sum step by step and show every figure they use, so you can check whether it fits your own case.
The glossary explains the terms as they come up. The guide to who decides what inside the Federal Reserve covers who votes and when. And the balance sheet explainer covers quantitative easing and tightening, which move more slowly and do not show up in a single rate decision.
Guides, tools and a glossary
The guides take one thing at a time. The tools do the sums from published figures. The glossary says where each term is officially defined.
What happens on decision day
The sequence of releases on an FOMC decision day, from the statement to the press conference, and what each one contains.
Read the sequence →How the voting rotation works
Which regional Fed presidents vote each year, and why the rotation is fixed.
Trace the rotation →What the balance sheet shows
What quantitative easing and quantitative tightening actually do to the balance sheet, and where the weekly figures are published.
Read the mechanism →Score the Fed's own forecasts
Pick a year and compare the Fed's median forecast at each publication date against what happened, though revisions can shift the picture.
Run the scorecard →Vocabulary that names its source
Each term explained in everyday words first, with the document where it's officially defined.
Browse the glossary →What changes between one decision and the next
The decision itself is just the rate. Around it the Committee puts out a statement on the day, a note saying which rates it has actually changed, and minutes of the discussion some weeks later. Any of those can read differently from last time, and that is often where the real news is.
What tends to move between decisions
- The target range, and whether it moved at all
- The wording of the statement, where one added or dropped phrase can signal a shift in thinking
- The rates in the implementation note, including the one paid on reserve balances
- How the vote split, and who disagreed
Every one of those sits in a document you can open. What happens on an FOMC decision day follows the sequence from the statement to the press conference, and how the FOMC voting rotation works covers who votes in a given year.
Recent guides and decision notes
What was decided, and what changed in the documents that followed.
What Happens on an FOMC Decision Day
The sequence of an FOMC decision day: what is published, in what order, and how to follow along from the primary documents — a practical guide for the next meeting.
Why the Fed Targets PCE, Not CPI
CPI and PCE measure inflation differently. The Fed chose PCE — and the reasons are in a published document from 2000. Here is what it says and what the difference means.
What Is the Overnight Reverse Repo Facility?
The ON RRP facility explained: what it does, who uses it, why it matters for the interest rate floor, and where the daily figures are published.
How the FOMC Voting Rotation Works
The FOMC has twelve voting members but nineteen participants. Here is how the annual rotation of regional bank presidents works, who votes this year, and where the roster is published.
What Forward Guidance Is and Is Not
Forward guidance is what a central bank says about its own future decisions — but it is not a promise. Here is how it works, where it appears, and what the published record shows about how often it ...